Streets Ahead : Streets Ahead Edition 12
Is it a good time to buy? Consumer sentiment around whether or not it is a good time to buy a home or an investment property is a key factor influencing overall homebuyer confidence. Following a deep dive into these issues in September 2015, we revisit the drivers amongst those who believe it is a good or bad time to buy property, to see what has changed. Owner-occupied property Streets Ahead | Genworth Homebuyer Confidence Index - March 2016 8 The decrease in consumer sentiment around whether it is a good to buy a home may be attributable to slowing house price growth and increasing interest rates imparting a number of potential borrowers with a wait-and-see attitude. Nathan McMullen supports this view: “Some people may not forecast that the cost of homeownership is going to increase in the near term. They’re choosing to wait, and delaying their purchasing intentions. What we occasionally hear is people saying, ‘I might wait and see if prices will drop’”. Proportion of all respondants Main drivers Segment responses State responses Good time to buy Bad time to buy 42% down from 48% 19% up slightly from 18% 1. Low interest rates so can repay the loan faster (49% down from 53%) 2. Belief that property prices will only increase in the future (43% down from 47%) 3. Low interest rates so can borrow more to buy in a better location (25% down from 28%). 1. Property is overvalued (48% down from 56%) 2. Belief that property prices are going to fall (31% down from 32%) 3. Concern about the economic outlook (26% down from 27%). FHBs - most likely to believe it is a good time to buy as property prices will only increase in the future (36%) Mortgagors - a higher proportion believe that now is a good time to buy a home because of low interest rates (55%) Non-Property Owners - most likely to believe now is a good time to buy a home because of low interest rates (46%). FHBs - believe it is a bad time to buy a home as they believe property is overvalued, interest rates are about to rise and they have other things going on in their life (all 33%) Mortgagors - most likely to believe now is a bad time to buy a home because property is overvalued (47%) Non-Property Owners - a higher proportion believe it is a bad time to buy a home as they cannot purchase the type of property they want to live in (43%). Queensland had the highest proportion of respondents who believe it is a good time to buy a home (50%) while New South Wales had the lowest (37%). New South Wales and Victorian respondents are the most likely to believe that now is a bad time to buy a home as property is overvalued (52% and 57% respectively). Note: All changes compare March 2016 to September 2015.
Streets Ahead Edition 11